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Fri 27 Feb 2009 04:00 AM

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Hoteliers don’t have a clue

Hotel industry expert Guy Wilkinson says many investors insist that they know all there is to know about the business of hotels, just because they have stayed in some of the world's best properties.

There are some jobs that we all agree it would be a bit difficult to do without the necessary training: nuclear physicist, brain surgeon, computer programmer, veterinarian or chromatic button accordion player.

But others are fair game for criticism by any old amateur. Jobs like photographer, chef, interior designer, taxi driver, pop singer and hospitality consultant are all prone to ungracious put-downs from casual observers who think they could do better on the grounds that ‘there's nothing to it'. Hospitality consulting, according to some, is a bit like photography: you just press the button and "click," out pops the feasibility study.

Hoteliers are also naturally exposed to potential criticism of this sort, on the grounds that they apparently do nothing out of the ordinary to earn their living.

Some investors build hotels even when there is not strictly a need to do so.

They let people stay overnight in their spare bedrooms, they invite people to dinner and generally give their children the run of the garden. I mean, any self-respecting home owner does the same thing for friends and relatives, so where's the skill in that?

At my end of the hotel industry, this attitude comes into most lurid focus when we meet that always entertaining archetype, the hotel owner who thinks he knows better than the operator, how to manage - for which, read also, design, build, furnish, fit out, equip, brand, staff, market and supply - a hotel. I say entertaining because the most trying ones are often the most infectiously enthusiastic.

And their reason for believing they know more than we do? Because they've stayed in lots of hotels! I know it's true that many of our dear patrons in the Gulf have travelled the world and sampled many of its best hotels, but isn't that a bit like saying I can fly a plane because I've flown in one?

These powerful amateurs are difficult to contradict because they are generally also the paymaster and typically have a smattering of knowledge - and you know how the saying goes that ‘a little knowledge is a dangerous thing'. I have to inform ingenuous Hotelier readers that consultants are often hired simply to confirm their clients' opinions and not necessarily to share their own hard-won expertise.

The enthusiasm of owners is often manifested in a barely resistible desire to have time-honoured hotel operations carried out in a completely different - and not necessarily better - way, or to reinvent perfectly good hotel amenities that people have happily patronised for centuries.

I have wasted happy hours discussing charmingly harebrained schemes with such people. For example, one investor was responding to a brief for a project with a hotel tower on one side and a serviced apartments tower on the other. Simple.

You would have thought so, but no, his idea was to create a kind of hybrid standard room/studio apartment unit that would somehow straddle the markets for both types of accommodation - but which was in fact neither fish, nor flesh, nor good red herring!

Budgets are always fun to discuss. Miraculously, it appears that most owners are able to build a hotel room for far less than a fully-informed international cost consultant calculates it will cost. Sometimes, I admit, this can be true, especially if the client happens to own a construction company or a cement factory.

But more often than not, the fact is that the owner's back-of-an-envelope estimate fails to show the slightest understanding of construction realities. One of my cherished memories is of the client who proudly reported to me one day that he had completed the development cost budget for his four-star hotel after checking out the price of furniture at Ikea.

Please note: if you are a developer and this anecdote is not amusing, then please contact your nearest a) quantity surveyor or possibly b) therapist.

Finally, I can reveal to you that some investors build hotels even when there is not strictly a need to do so. I know this is shocking, but it is true - sometimes, they build only to see their names up in lights.

When this is the case, it can be a fruitless exercise to argue about the virtues of any brand that is not essentially the hotel equivalent of a Rolls Royce or at least a Mercedes Benz.

We insiders know the ironic truth of the situation, which is that the higher the star rating of a hotel, the higher the costs and the lower the profits - in percentage terms at least. You'd think that would be a persuasive argument, but it is not. It's like telling these people they'd get better mileage from a Daihatsu. So what?

You probably thought that hotels were put there to give people a place to stay overnight. Not so, at least not the five-star ones. They are truly monuments to their owners, much as the Sistine Chapel was a tribute to Michelangelo's patron, Pope Julius II. But who ever heard of him?

Guy Wilkinson is a director of Viability, a hospitality and property consulting firm in Dubai. For more information, e-mail: guy@viability.ae.

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